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Utilities Commission still has questions about Big Stone II

WILLMAR -- Willmar Utilities Commission members say they need more questions answered before they commit to buying power from the proposed Big Stone II power plant.

Commissioners again tabled a motion to buy 30 megawatts from Big Stone II until they meet in special session at 9:30 a.m. Monday with a representative from Big Stone partner Central Minnesota Municipal Power Agency to get some answers.

Central Minnesota's responses to questions raised by the commission two weeks ago led to more questions being raised during the commission's meeting this week, said Bruce Gomm, utilities general manager.

One question that still needs clarification is whether Willmar is an owner of Big Stone II. Commissioners say Willmar is not a member of Central Minnesota, but would only be buying power through Central Minnesota.

Central Minnesota's response to a question about the length of a power purchase agreement indicated Willmar would be an owner, however. Central Minnesota said the ownership share would run for 30 years, plus procedures would be included to extend the agreement.

Another question raised two weeks ago was whether Willmar would be reimbursed for its share of interim developing and planning costs associated with obtaining power line and plant permits. Those costs are being paid with loans, and the owners are being charged for principal and interest costs on those loans.

According to Central Minnesota, Willmar is projected to pay an estimated $1.3 million through Dec. 31, 2008, as its share of the interim costs. Gomm said the estimate is based on formulas used by Central Minnesota to calculate the payment on the interim financing.

After the plant begins producing power in 2013 or 2014, Willmar could be paying from $60 to $65 per megawatt.

"We want to know the exact payment amounts and the terms of those payments,'' said Bob Bonawitz, commission president. "We want to know how those payments relate to the future energy price that we will be paying after the plant comes on line in 2013 or 2014.''

Also, he said the commission needs a clearer understanding of its relationship with Central Minnesota as an agency and answers to two other questions:

- What is Willmar's percent share of energy that will be obtained from Big Stone by Central Minnesota.

- How will Willmar obtain a return on its Big Stone investment if Willmar buys 30 megawatts of power.

"Those are important because it's just a significant investment that we would be making, and I think we have an obligation to the citizens of Willmar to do the best job we can to make sure that we understand what we're getting into,'' Bonawitz said.

John Brinkman, Willmar utilities' power supply and purchasing manager, said, "We need to nail this down. We need to understand the financing. We only have a contract with (Central Minnesota) for megawatts.''

In other business Monday, the commission:

- Approved a three-year labor agreement with 10 non-union employees. The agreement provides a 3 percent wage increase per year.

- Approved the 2008 capital improvement budget that includes an estimated $10 million for a wind turbine generation project.

- Voted to re-advertise for bids to buy a transformer for the electrical substation at the new wastewater treatment plant. Bids were originally opened Dec. 19, but new bids will be sought because utility staff did not include requirements for a bid bond and performance bond in the original bid specifications. New bids will be opened Jan. 16. Wes Hompe, staff electrical engineer, said the delay will not hinder timely completion of the treatment plant substation.

- Honored commissioner Marv Kray who finishes 6½ years of service on the commission at the end of the year.

- Was told by Gomm that two power plant workers received minor injuries in plant accidents last week. One worker received a first-degree burn on his face and arm from a flare-up while pulling ash from a boiler. The worker was treated at the hospital and missed 1½ days of work. Gomm said safety procedures were revised and protective apparel will be required. Another worker was emptying coal ash when the wind blew some ash behind his protective glasses. The worker had his eyes washed out. He did not lose any time at work.